THE PEOPLE PERSPECTIVE
US Household Finances
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Average annual earnings going down
From 1972 to 2008 the average annual wages trended downward. In this same period corporate productivity and profits increased by as much as 400%.
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Household debt going up
In order to consumers to buy, more and more credit was made available ... often by loosening standards to enable lenders to provide the credit.
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Ratio of credit to earnings going up dangerously
Ratio of credit to earnings went up dangerously and is one of the main reasons that there was a financial crisis. Yes ... financial institutions were overly clever and created high risk high reward financial instruments ... but the core problem was that the buying power of the consumer was gamed in favor of the financial institutions until it was impossible to sustain.
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